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2016 Outlook: Headwinds or Tailwinds?

Brian LewandowskiAssociate DirectorBusiness Research DivisionLeeds School of Business November 20, 2015

Business Research Division | Leeds School of Business | University of Colorado Boulder

Real GDP Growth

-10.0

-8.0

-6.0

-4.0

-2.0

0.0

2.0

4.0

6.0

8.0

10.0

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016

PercentQuarterly and Annualized Real GDP 1990-2016

Quarterly GDP

Annualized GDP 1990-1999

Annualized GDP 2000-2009

Sources: Bureau of Economic Analysis and Consensus Forecasts.


Long Term GDP Growth Trend

0.00.51.01.52.02.53.03.54.04.55.0

Q2 1967 Q2 1973 Q2 1979 Q2 1985 Q2 1991 Q2 1997 Q2 2003 Q2 2009 Q2 2015

20-Year Quarterly Moving Average

Sources: Bureau of Economic Analysis and Consensus Forecasts.


10

12

14

16

18

20

22

2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024

Trillions, USD

Recession 18 Months

Recession 8 Months

GDP

Actual Projected

Source: Congressional Budget Office, Budget and Economic Outlook, Fiscal Years 2015 to 2025.

GDP and Potential GDP

Potential GDP


National Employment

Sources: Bureau of Labor Statistics (Seasonally Adjusted), National Bureau of Economic Research, and NABE Outlook.

-900

-700

-500

-300

-100

100

300

500

2000 2002 2004 2006 2008 2010 2012 2014 2016

Thousands, Month-over-Month

Recession 18 Months

Recession 8 Months


Labor Force Participation Rate

Sources: Bureau of Labor Statistics (Seasonally Adjusted), National Bureau of Economic Research, and NABE Outlook.

62.0

63.0

64.0

65.0

66.0

67.0

68.0

1980 1985 1990 1995 2000 2005 2010 2015

Percent


Labor Force and Unemployment RateNational by Age Cohort October 2015

0

10

20

30

40

50

60

70

80

90

20-24 25-34 35-44 45-54 55+

Labor Force Participation RateUnemployment Rate

Source: Bureau of Labor Statistics, Current Population Survey (CPS).


Unemployment Rate

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

U-3U-2

U-1

Percentage of Labor Force

Source: Bureau of Labor Statistics (Seasonally Adjusted).


Labor Underutilization

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

U-6

U-5U-4U-3U-2

U-1

Percentage of Labor Force



State Employment GrowthPre-Recession Peak to September 2015


Year-over-Year Growth


Personal Income Growth, Q2 2014-Q2 2015


Household Wealth

0

20,000

40,000

60,000

80,000

100,000

120,000

Q1 2005 Q1 2007 Q1 2009 Q1 2011 Q1 2013 Q1 2015

$ Millions

Mutual Funds

Corporate EquitiesReal Estate

Other Assets

Source: Federal Reserve Board, Balance Sheet of Households and Nonprofit Organizations (B100) (Not Seasonally Adjusted).


S&P/Case-Shiller Home Price IndicesAugust 2015

Source: Standard & Poor’s (Not Seasonally Adjusted).

0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0%

New YorkChicagoWashingtonClevelandMinneapolisBostonCharlottePhoenixDetroitAtlantaSan DiegoLas VegasTampaLos AngelesMiamiSeattleDallasPortlandDenverSan Francisco

Percent Change


Housing Affordability Index

60

100

140

180

220

1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015

Composite Index

Source: National Association of Realtors.


Household Debt BurdenPercent of Disposable Income

13.0

14.0

15.0

16.0

17.0

18.0

19.0

20.0

8.0

9.0

10.0

11.0

12.0

13.0

14.0

15.0

1980Q2 1983Q4 1987Q2 1990Q4 1994Q2 1997Q4 2001Q2 2004Q4 2008Q2 2011Q4 2015Q2

FORDSR

Financial Obligations Ratio (R-axis)

Financial Obligations Ratio (L-axis)

Source: Federal Reserve, Household Debt Service and Obligations Ratios.


Household Debt Growth

Source: U.S. Flow of Funds Account, Z.1 data release.

-500

0

500

1,000

1,500

Q22001

Q22002

Q22003

Q22004

Q22005

Q22006

Q22007

Q22008

Q22009

Q22010

Q22011

Q22012

Q22013

Q22014

Q22015

Consumer Credit Debt

$ Billions Household Debt Growth

Home Mortgage Debt


0

20

40

60

80

100

120

140

160

1995

1997

1999

2001

2003

2005

2007

2009

2011

2013

2015

1985=100

National Confidence

Index of Consumer ConfidenceHousing

Sources: The Conference Board and National Bureau of Economic Research.

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

Plans to buy a home in the next 6 months

NewLived inUncertain

6.35.7

October2015

October 2014


Vehicle Sales and Retail Sales

Sources: Seasonally Adjusted Annual Rate, Autodata Corp., Motor Intelligence, U.S. Census Bureau.

-15.0

-10.0

-5.0

0.0

5.0

10.0

15.0

2005 2007 2009 2011 2013 2015

Retail and Food Services SalesYOY, Percentage Change

0

5,000

10,000

15,000

20,000

25,000

2005 2007 2009 2011 2013 2015

Vehicle SalesThousands, SAAR


U.S. HousingSupply, Inventory, and Permits

Source: New Houses Sold and For Sale, U.S. Census Bureau.

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

0

100

200

300

400

500

600

700

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Months of SupplyNew SF Home

Inventory (thousands)

Housing Supply (R Axis)

SF Homes for Sale

Number of Private Housing Building Permits


National Housing Starts

1.121.27

0.0

0.5

1.0

1.5

2.0

2.5

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Millions

Sources: U.S. Census Bureau and Consensus Forecasts.


ISM Indices

Source: Institute for Supply Management (ISM).

30

35

40

45

50

55

60

65

70

2003 2005 2007 2009 2011 2013 2015

ISM Manufacturing Index

30

35

40

45

50

55

60

65

70

2003 2005 2007 2009 2011 2013 2015

ISM Non-Manufacturing Index


The FED

• QE 1

• QE 2

• Fed promises near zero interest rates until mid-2013, 2014, 2015, 2016, 2017?

• Large balance sheet

• Key Rate Change in December?

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000

4,500,000

5,000,000

2007-01-03 2008-12-03 2010-11-03 2012-10-03 2014-09-03

Other Assets

Mortgage BackedSecuritiesFederal AgencyDebt SecuritiesTreasurySecurities

$ Millions

Source: Federal Reserve Balance Sheet.


Interest Rates

Source: Federal Reserve and Moody’s Analytics.

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Interest Rates, 2000-2017(forecast)Percent

10-Year T-Note

3-Month T-Bill


The Colorado Economy

(Cameron Redwine)

(Ed Andrieski)


Colorado Rankings

Metric 1-Year 3-Year 5-Year 10-Year Real GDP Growth 5 3 9 9Employment Growth 21 6 5 5Population Growth 4 3 4 6Personal Income Growth 7 1 3 9PCPI Growth 9 12 23 29PCPI 14 16 13 12Average Annual Pay Growth 8 16 20 20Average Annual Pay 13 12 12 12Unemployment Rate 13 27 29 22Labor Force Growth 38 17 12 7FHFA Home Price Index 1 5 6 4

Data Sources: Bureau of Economic Analysis, Bureau of Labor Statistics, U.S. Census Bureau, Federal Housing Finance Agency, and the Colorado State Demography Office. BRD calculations. Note: 1-year, 3-year, and 5-year are based on the compound annual growth rate.


Change in Population

4th-fastest state for percentage growth

8th-fastest state for absolute growth

22nd-most populated state in nation

Continued net migration into the state

83% of population along Front Range

Source: Colorado Demography Office.

0

20

40

60

80

100

120

2004 2009 2014 2019 2024 2029 2034 2039

ThousandsChange in Colorado Population

2004-2040

Natural Increase

Net M

igration


Colorado EmploymentMonths to Recovery


-7.0-6.0-5.0-4.0-3.0-2.0-1.00.01.02.03.04.05.06.07.08.0

0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85

Percent

Number of Months Since Peak

January 2001-May 2008

January 2008-September 2015


National and Colorado Job Growth

-6.0%

-4.0%

-2.0%

0.0%

2.0%

4.0%

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Year-over-Year Employment Percent Change

National Colorado

Source: Bureau of Labor Statistics, CES.


Colorado EmploymentWorkers Added 2002-2016 (Projected)

Sources: Colorado Department of Labor and Employment and Colorado Business Economic Outlook Committee.

-135

-110

-85

-60

-35

-10

15

40

65

90

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Thousands


Unemployment Rate

0

2

4

6

8

10

12

1980 1985 1990 1995 2000 2005 2010 2015

Percent

Source: Bureau of Labor Statistics, CES.

Colorado

National

30-YearAverage


Employment RecoveryNational, State, and Local

-15.0%

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

1 6 11 16 21 26 31 36 41 46 51 56 61 66 71 76 81 86 91 96

Percent

Number of Months Since Peak

National

Colorado

Colorado Springs

Greeley

Ft. Collins-Loveland

Pueblo

Grand Junction

Boulder

Denver



Regional Employment Growth and Unemployment

Source: Bureau of Labor Statistics, Current Employment Statistics.

0 2 4 6

Grand Junction

Colorado Springs

Boulder

Pueblo

Denver-Aurora-Broomfield

Fort Collins-Loveland

Greeley

Unemployment RateSeptember 2015

Colorado 3.3% NSA 4.0% SA

0 1 2 3 4

Grand Junction

Colorado Springs

Boulder

Pueblo

Denver-Aurora-Lakewood

Fort Collins-Loveland

Greeley

Employment Growth Rate, September 2015 YoY

Colorado 1.7%


2014

EHS

L&H

Govt

ConstFinancial

MFG TTU Other Mining InfoPBS

2015

2,470

2,480

2,490

2,500

2,510

2,520

2,530

2,540

2,550

Total jobs gained:48,900

Total jobs lost:7,400

Net change: 41,500

Employment in Thousands

Colorado Industry GrowthSeptember 2014 – September 2015

Source: Bureau of Labor Statistics, Current Employment Statistics (SA).


Colorado Taxable Retail Sales12-Month Rolling Sum

Sources: Colorado Department of Revenue and Colorado Business Economic Outlook Committee.

50

55

60

65

70

75

80

85

90

95

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Colorado Taxable Retail Sales12-Month Rolling Sum12-Month Rolling Sum,

$ Millions

42 Months

49 Months


Colorado General FundGross Revenue (excluding reserves, diversions, and transfers)

Source: Colorado Office of State Planning and Budgeting, excluding reserves, diversions, and transfers, December 2014.

6,000

6,600

7,200

7,800

8,400

9,000

9,600

10,200

10,800

11,400

12,000

FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018

$ Millions


Housing and Construction


Federal Housing Finance Agency (FHFA)House Price Index

Source: Federal Housing Finance Agency, All Transactions Indexes.

0.0 4.0 8.0 12.0

Colorado Springs

Grand Junction

Pueblo

Fort Collins

Boulder


Greeley

Percent

Colorado 10.62%

Federal Housing Finance AgencyHome Prices by MSA

Q2 2014 – Q2 2015

0.0 1.0 2.0 3.0

Colorado Springs

Grand Junction

Pueblo

Fort Collins

Boulder


Greeley

Percent

Colorado 2.2%

Federal Housing Finance AgencyHome Prices by MSA

CAGR Q2 2005 – Q2 2015


Colorado Foreclosures2003-2015

Source: Colorado Division of Housing

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Filings

Sales

2014YTD

2015YTD


0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Residential Building Permits2004-2015

Residential Building Permits

Sources: U.S. Census Bureau.

Multifamily

Single Family

2014 2015

September YTD


0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

2014 2015

September YTD2014-2015

Value of ConstructionColorado 2005-2014

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

$ Millions

Nonbuilding

Residential

Nonresidential

Source: McGraw-Hill Construction.


10-Year Construction EmploymentColorado vs. National Indexed Growth

-50.0

-40.0

-30.0

-20.0

-10.0

0.0

10.0

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

U.S. Construction Employment

Colorado Construction Employment

2005=0

Source: Bureau of Labor Statistics


WTI Oil Price

Source: Energy Information Association (EIA), Cushing, OK WTI Spot Price FOB.

Average 2005-2015

$0.00

$20.00

$40.00

$60.00

$80.00

$100.00

$120.00

$140.00

$160.00

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Dollars per Barrel

November 10, 2015:$44.23

November 10, 2014:$77.43

July 3, 2008:$145.31


Colorado Oil Production

Source: Colorado Oil and Gas Conservation Commission.

0

10,000,000

20,000,000

30,000,000

40,000,000

50,000,000

60,000,000

70,000,000

80,000,000

90,000,000

100,000,000

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Barrels95.2 M

Growth29.9 M


Concentration of Taxable Production


Concentration of Employment


Thank You

2016 outlook: headwinds or tailwinds?files.ctctcdn.com/5ce5d2cc001/5be7e792-146b-47ff-9a06-a7... ·...

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